Essay on Ethical Implications of Outsourcing

1159 Words Jul 12th, 2010 5 Pages
Ethical Implications of Outsourcing Shawn Schneider University of Phoenix Michael Osby MGT216 May 18, 2009

Ethical Implications of Outsourcing For several years, many companies have turned to outsourcing income tax preparation and income tax return filing to companies in other countries to improve performance. The act of outsourcing a company’s tax preparation is reasonable if the company is confident with the servicing company which is contracted; by outsourcing one part of the business they can use resources in other areas (Mintz, 2004). What happens when a tax preparation company outsources customer tax preparation and tax return filing to other countries? When an individual takes
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for security of the information. A breach in the security can be costly to tax preparation companies; consumers have an expectation of the companies they contract to keep their personal and financial information safe. When the security measures a company takes are not sufficient the ability of hackers stealing information is elevated (Brody, Miller, & Rolleri, 2004).
Disclosure of Information Liability Insurance companies urge tax preparation and tax return companies to incorporate “a disclosure of electronic communication devices into the tax engagement letter” (Brody, Miller, & Rolleri, 2004). In the letter the company discloses how the process is conducted; confidential personal and financial information is sent electronically over the internet or facsimile. Although vast measures are taken by the firm the possibility of the information being compromised is potential but minimized. The company will normally state that once the information has been sent electronically they are no longer responsible for the safety of that information. Although many companies do have disclosure statements, many still do not and take the chance of being sued if an individual’s personal or financial information is intercepted by unknown persons. The amount of money a company could be ordered to pay to an individual for such a disaster could very well put them out of business. The chance

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